Staking and Revenue Sharing

1. The Core Revenue Model: Aligning Protocol Success with User Rewards

In the competitive landscape of decentralized finance (DeFi), a transparent and user-centric revenue model is a strategic cornerstone for fostering long-term protocol health and decentralization. By directly linking the platform's success to the financial rewards of its community, a protocol can create a powerful alignment of interests. Surge Protocol has built its tokenomics on this principle, establishing a clear and direct mechanism for value distribution.

The foundational principle of Surge's revenue model is its commitment to returning all generated value directly to the token holders who support the network. This is not a partial distribution or a complex treasury-managed system; instead, it is a direct pass-through of all platform earnings.

"100% of protocol revenue goes directly to SURGE stakers in the form of ADA."

This protocol revenue is generated from a simple, transparent fee structure. Surge applies a 0.1% fee on every transaction executed through the platform. These fees are collected from the trading volume and subsequently distributed to stakers in ADA, the native asset of the Cardano blockchain. This model is critically important for two reasons: first, it provides a stable and immediately usable reward in a major, liquid asset, rather than the protocol's often more volatile native token. Second, it avoids the inflationary sell pressure that plagues many DeFi reward models, thereby protecting the intrinsic value of the SURGE token itself.

To illustrate the model's potential, for every 100 million ADA in trading volume processed by the platform, the protocol generates 100,000 ADA in fees. This entire amount is then distributed among the community of SURGE stakers, providing a tangible metric for users to gauge the value being generated. While this direct revenue stream establishes the token's foundational value, the tiered staking system provides the mechanism for users to unlock and amplify these rewards.

2. The SURGE Staking Tiers: Unlocking Platform Benefits

A tiered staking system serves as a strategic mechanism to reward deeper commitment and align the interests of the most dedicated users with the protocol's long-term growth. By offering progressively valuable benefits, such a system incentivizes accumulation and sustained participation. Surge implements this model to create a clear pathway for users to enhance their platform experience and financial returns.

Staking the SURGE token is the key that unlocks this tiered system. The amount of SURGE a user stakes determines their access to enhanced revenue sharing, reduced trading fees, and more advanced platform capabilities. This creates a direct correlation between a user's staked commitment and the value they receive, as outlined in the four-tier structure below:

Tier	Minimum SURGE Staked	Key Benefits	Platform Access
Tier 1	Low	Standard	Core trading tools
Tier 2	Medium	Reduced trading fees	Unlock advanced strategies
Tier 3	High	Even lower trading fees	Higher volume limits
Tier 4	Very High	Best available fees	Priority access to new features

The structure is intelligently designed to cater to a spectrum of users. Tier 1 provides a low-cost entry for casual traders to begin earning, while Tiers 3 and 4 offer significant fee reductions and higher limits; benefits that directly appeal to high-frequency traders and institutional players whose profitability hinges on minimizing operational costs. This creates a clear value ladder, encouraging deeper capital commitment and solidifying the token's role as a core component of the platform experience.

3. Synthesizing the Value Proposition for Stakers

The combination of a direct, 100% revenue-sharing model and a multi-tiered utility system forms the foundation of the SURGE token's compelling value proposition. This dual approach ensures that holding and staking the token provides both direct financial returns and enhanced functional benefits within the Surge ecosystem.

The primary benefits for a SURGE token staker can be distilled into three core advantages:

• Sustainable Real Yield in a Blue-Chip Asset: Stakers earn a direct share of protocol revenue paid in ADA. This creates a sustainable yield sourced from real economic activity, not inflationary token emissions, insulating holders from the sell pressure that plagues many DeFi reward models.

• Direct Economic Advantages for Active Traders: Staking is not passive; it unlocks tangible competitive edges. Progressively steep fee reductions, access to advanced strategies, and higher volume limits directly translate to improved trading profitability and capital efficiency for the protocol's most active users.

• Incentivized Long-Term Participation: The tiered system creates a clear and rewarding path for users to deepen their engagement with the protocol. This structure encourages the accumulation and long-term staking of SURGE, fostering a committed community whose interests are fundamentally aligned with the platform's success.

Ultimately, this comprehensive model creates a powerful, symbiotic relationship and a virtuous cycle: staking reduces trading fees, which incentivizes more on-platform volume. Increased volume generates more protocol revenue, which is distributed back to stakers in ADA, further increasing the value and incentive to stake. This self-reinforcing loop ensures that the growth of the Surge platform directly translates into greater financial rewards and enhanced capabilities for its dedicated community.